The banking system remained well-capitalised in June with a risk-weighted capital ratio and core capital ratio of 14.7% and 12.9% respectively.
In its June monetary and financial development statement, Bank Negara said the level of net impaired loans had improved, amounting to 1.5% of net loans due to recovery and write-off exercise by some banks as part of the balance sheet strengthening exercise.
Loan loss coverage remained high at 98.9%.
On another note, inflation, which is measured by the change in the consumer price index, moderated to 1.6% in the month due to lower inflation in the transport, and food and non-alcoholic beverages categories. The price of RON97 petrol was revised downward, while in the food and non-alcoholic beverages category, a lower inflation rate of 2.9% was recorded due to smaller increase in prices in food away from home sub-category.
“Interbank rates were stable in June,” the central bank said. On retail lending rates, the average base lending rate of commercial banks remained stagnant at 6.53% at end-June. During the period, retail deposit rates remained stable.